U.S. growing dependence on corn increasingly worries economists
food made directly from these commodities, such as bread, pasta and tortillas, and food made indirectly, such as pork, poultry, beef, milk and eggs. If it happened this summer, it would be especially bad because of the current pace of global food inflation. “The rest of the world is less able to pay high prices for food. What’s annoying for us is life-threatening elsewhere,” Brown said.
The shortfall would lead to the “politics of scarcity,” in which nations would stop exporting their domestic grain and soy crops to keep food prices under control for their own people. Even without a crisis in America’s corn belt, that’s already happening, Brown said. In January, China levied export tariffs of 5 percent for corn, rice, and soybeans and 20 percent for wheat to keep grains from leaving the country. Russia, Argentina, and other nations also are slapping tariffs on grain exports to protect their food supplies. All of this has contributed to the growing cost of corn and wheat. With wheat prices at record levels, economists expect American farmers to shift some corn acreage back to wheat, a move that could make corn supplies and prices even more vulnerable to the climate. Here in the United States, a corn shortfall would also force federal regulators to make difficult choices. Among them: Should they stick to the ethanol production goals outlined in the 2007 Energy Independence and Security Act or work to free up corn stocks to replenish the domestic and international food supply? The government could also lift tariffs on sugar-based ethanol from Brazil and start buying up available product. Regardless, U.S. consumers would be faced with higher prices for gasoline or food, probably both, analysts believe. “We could see a spike that would raise prices so much in so many places that it could tip the U.S. into a recession,” said Darin Newsom, senior analyst for DTN, an agriculture and energy research firm in Omaha.
More research and improved production of cellulosic ethanol — made from agricultural waste, switchgrass and other nonfood plant material — would ease dependence on corn, said Hartwig of the Renewable Fuels Assn. Substantial production of such fuel, however, is at least a decade away, according to government projections. For now, the United States will have to hope for good weather, Brown said. “Historically, we have had a food economy and an energy economy that were for the most part separate,” Brown said. “Now they are starting to fuse.”
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